It is no secret that the ongoing trade wars, tariffs, and tense negotiations have left the world in a perilous place from an economic standpoint.
The situation has been evolving so rapidly that any information provided about the specifics of tariffs is likely outdated by the time you have read it.
One thing that shines through all of the recent tensions and diplomatic endeavours is the need to rethink our approach to global finance.
Where once the world sprawled open with endless possibilities of trade and manufacture, the threat of conflict, natural disaster, and economic imposition has left some companies feeling nervous about continuing to connect on a global scale.
Nearshoring is the process by which one moves business operations to a nearer country and might be worth considering as a means to assuage fears and trepidations brought about by the current economic storm.
There is a significant amount of financial consideration that goes into nearshoring decisions, so we would like to guide you through some things worth keeping in mind.
Building tariff impact models
The decision on how best to implement any nearshoring of vital trade is only as effective as one’s understanding of the global economy.
With the two biggest economies fighting for dominance, many countries are getting caught in the crossfire.
It is essential to create a tariff impact model to best determine when, where, and how to import or export goods to and from a new country.
It might take some time, and a good amount of professional help and guidance, but creating a resource that can dynamically track the expected costs and benefits of moving trade to another country is more important than ever.
Moving such vital aspects of your business is not something that can be done lightly, so understanding the full extent of every decision is imperative to ensure your business endures this period of instability.
When is it time to nearshore?
Although Brexit has complicated trade relations with the EU, the current volatility of the global economy has raised serious questions surrounding trade with the USA.
It might be tempting to take an optimistic approach and assume that a trade deal will be struck with the USA, but the latest uncertainty has shown that there is little guarantee of security regarding any economic plans.
Nearly every country in the world is considering how best to handle the current economic climate, which means most businesses are doing the same.
It could be the right time to take a step forward and forge new connections.
Developing closer economic ties with countries and companies in a similar position to your own with mutual interests may help off some stability in the face of economic uncertainty.
When will the economy stabilise?
No one can say for sure when the economy will stabilise, but recent inflation trends show some degree of promise within the UK.
The extra breathing room afforded by the slight fall in inflation might signal a slight uptick in economic health, a valuable asset in negotiating new deals with international businesses.
Our expert team are on hand to guide you through this current economic turmoil, and the potentially daunting process of nearshoring some of your vital connections.
Businesses that do not move quickly to adapt to the ever-changing situation will find themselves left behind and could face greater struggles in the future.
Keep your business financially agile by speaking to our team for guidance on nearshoring today.